Home Debt obligation Retirement debt eats away at public funding for Louisiana schools :: WRAL.com

Retirement debt eats away at public funding for Louisiana schools :: WRAL.com


– Nearly one in every $ 4 in state aid sent to Louisiana public schools each year disappears before it reaches classrooms, diverted to pay retirement obligations that cost $ 853 million a year, according to a new report from the legislative auditor.

The retirement debt payment stands at $ 1,302 per student and absorbs an average of 10% of the total funding available to schools from state, local and other sources, according to the 44-page review of the Office of the Legislative Auditor Mike Waguespack.

The lawyer reports that the audit indicated that the Louisiana legislature may consider revamping the way former teachers’ retirement debt is handled in a way “that may be less onerous for participating schools.”

State aid to public schools totaled $ 3.9 billion for the 2019-2020 fiscal year reviewed by auditors. The teachers’ debt obligation grabbed 24% of that allowance, according to the report. A total of 1,355 traditional and charter schools participate in the retirement system.

In a written response to the auditor, State Superintendent of Education Cade Brumley said that the annual obligation to former teachers “represents a large portion of the budget for the city and county school systems. parish and is linked to the largest expenditure on education, staff salaries.

Pension debt piled up after lawmakers and other state leaders allowed teachers to continue growing without identifying a way to pay for it. The annual payments required from school systems are intended to reduce long-term debt and to account for pension benefits owed to teachers when they retire.

Debt is supposed to decrease over time, thus easing the burden on school systems.

Voters in 1987 approved a constitutional amendment that required the legislature to repay the debt of teacher and state employee pension plans by 2029. After that, subsequent state laws require that pension obligations of teachers formed between 1988 and 2009 be paid by 2040.

Public schools reduce that debt each year by paying a percentage of their employees’ salaries, The Advocate reported. Most of that money goes to the Louisiana Teachers Retirement System and the Louisiana School Employee Retirement System.

The combined gap between what is owed for pension benefits and what is available to the two groups exceeds $ 11 billion, according to the audit.

Katherine Whitney, director of the Louisiana Teachers’ Retirement System, said paying down the debt has been a goal of her office and other members of the state government for years.

“By 2029, (debt) is expected to decrease 43% from the total of $ 10.37 billion in 2020 and by 2040 (debt) is expected to be less than $ 1 billion,” said Whitney in her written response to the audit.

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